To enable a wage tax subsidy for an assignment:Employers can claim several wage tax subsidies to reduce their tax bill:
Wage Tax Subsidy for Low Wages. This subsidy applies to each employee who is 23 or over and earns no more than a specified wage. Oracle Payroll enables you to calculate the wage tax subsidy for low wages for both full-time and part-time staff. You can produce a report showing the subsidy amount for specific employees, along with the information used to calculate the subsidy amount.
See: Generating the Dutch Wage Tax Subsidy Report
Wage Tax Subsidy for Long-Term UnemploymentEmployees are eligible for the subsidy if they were receiving it prior to the 1st January 2003 and:
Their income is less than or equal to 125% of the minimum wage, if they are under 50.
Their income is less than or equal to 145% of the minimum wage, if they are 50 or over.
The subsidy is available for up to 48 months.
Wage Tax Subsidy for Parental Leave. You can claim for eligible employees who earn at least the Dutch minimum wage for their age. These values are Dutch legislation defined. The subsidy is 50% of the taxable income used in the calculation, with a maximum value dependent on the employee's age.
Wage Tax Subsidy for Education. You can claim the subsidy for employees whose taxable income is no more than 110% of the minimum wage. Employees under 23 must have been unemployed to be eligible. The subsidy amount depends on whether your employee is deemed to be participating in training.
Warning: In the wage tax subsidy for low wages calculation, the application checks that the combined subsidy amount for education and low wages does not exceed a specific maximum amount. If it does, the application reduces the low wages subsidy value accordingly. However, in the case of multiple assignments, the application does this check only if the first assignment has an associated education subsidy and the second has the low wages subsidy, and not vice versa. The application performs this check in the low wages calculation only after the education subsidy is known, which is not possible if the second assignment has an education subsidy.
To enable a wage tax subsidy for an assignment:You enable the various wage tax subsidies available by selecting the Wage Tax Subsidy element in the Element Entries window, for all applicable employee assignments. You must also set the appropriate indicators to yes in the Miscellaneous Tax Details, for the applicable wage tax subsidies.
In the People window select your employee.
Choose the Assignment button.
Choose the Entries button on the Assignment window.
In the Element Entries window, select the Wage Tax Subsidy element from the list of values.
Save your work and close the Element Entries window.
In the Assignment window, select the Miscellaneous Tax Details tab.
Select the required tax indicators and set to yes.
Save your work.
Attention: Customers who have previously set up the wage tax subsidy, using the Wage Tax Subsidy Low Wages element, must remove any element entries set up for this element. For employee assignments affected by this subsidy, add an element entry for the element Wage Tax Subsidy. The default value of the Low Wages indicator at assignment level is Yes.
To override the age check for the wage tax subsidies for low wages and education:You can override the age check mechanism for this process if you do not require it.
In the People window enter your employee.
Choose the Assignment button.
Choose the Entries button on the Assignment window.
In the Element Entries window select the Wage Tax Subsidy element.
Choose the Entry Values button.
If you do not want to check that the employee meets the age criteria, then select Override Age Check, and enter Yes.
In the Training Type field select the type of Other or Starter Level from the list of values, if required.
Save your work.
Choose OK.
Required balances for the wage tax subsidies:The required balances are:
Wage Tax Subsidy Base Salary - holds the salary for use in the wage tax calculation.
Wage Tax Subsidy Parental Leave Hours - holds the parental leave hours for use in the wage tax subsidy calculation.
Wage Tax Subsidy Working Hours - holds the working hours for use in wage tax calculation.
Note: You need to set up the feeds for the above balances as they are not predefined. For starters and leavers, it is assumed that any value for parental leave hours has not been prorated.
You use the Wage Tax Subsidy Base Salary for comparing to the wage limit, to determine the wage tax subsidy. The same secondary element classifications as the existing standard and special rate taxable income balances can feed the subsidy salary. You, however, must set up the element classifications you require to feed the balance. The Wage Tax Subsidy Working Hours is sued to calculate the part time percentage, and adjusts the wage limit and resulting subsidy value. You must define the element feeds for the Wage Tax Subsidy Working Hours balance and Wage Tax Subsidy Base Salary.
In the Balance window, query the Wage Tax Subsidy Working Hours balance.
Choose the Feeds button.
Select the elements you have created to feed the working hours balance, in the Balance Feeds window.
Save your work.